Borrowers take big risks on interest-only mortgages

Rising interest rates and the end of low fixed rate deals has meant that many homeowners are seeing big increases in monthly mortgage repayments. Cath Hearnden, director of My Mortgage Direct, says: “We are seeing increasing numbers of borrowers who, rather than face reality, are using an interest only remortgage as a form of defence against the onslaught of rising repayments until the cavalry arrives.” My Mortgage Direct gives the example of a £150,000 mortgage repayable over five years. At an old fixed rate of 4.5%, monthly repayments would amount to £833.75, with a new 5.5% rate rep...